Cipla Ltd has put on hold a $215 million bid for control of South African generic drug firm Cipla Medpro.MUMBAI: India's third largest drug maker Cipla has emerged as the sole Indian contender for Kremers Urban Pharmaceuticals Inc, the specialty generics drug business of the $4 billion Belgian drug maker UCB. If Cipla is able to close it, the deal, pegged at around $1.3 billion, will eclipse Lupin's recent $880 million buyout of Gavis Pharma.

Lupin and Torrent Pharma were named as the other two Indian parties that had initially shown interest but eventually opted out.

Kremers had sales of $463 million in 2014.

"Cipla is the only Indian bidder for KU but it is pitted against a few powerful private equity players. It also depends on whether Cipla is prepared to shell out a large amount in a single bid," an industry watcher told ET. One of them is China's conglomerate China Grand Group.

UCB floated the divestiture of Kremers Urban last year, noting it will help reduce its debt load and planned to focus on its core focus areas of immunology and neurology drugs. Last November, two private equity players— Advent International and Avista Capital Partners—had jointly agreed to buy Kremers as part of an all cash deal of $1.525 billion.

However, a month later (December 2014), the deal was aborted citing unresolved regulatory issues for approval of its methylphenidate extended-release (ER) tablets. The US FDA directed Kremers to conduct additional studies to prove equivalence to Johnson & Johnson's Concerta, a drug used to treat attention deficit hyperactivity disorder.

Market watchers view Cipla's approach towards Kremers Urban as extremely measured, particularly given that there is no fixed time frame by which it has to be closed. "It will also test how much more is Cipla willing to go to build a strong base in the US," a sector analyst said.

Over the last three years, Cipla, under a refurbished management structure, has worked on establishing its own front-end marketing presence in several of its high growth markets including the US. Cipla is on the road to recovery after a lull of last few years. The company's net profit rose to Rs 671 crore in the quarter to June 2015 from Rs 295 crore a year-ago.

Total sales were at Rs 3,853 crore, a 46% jump from Rs 2,720 crore. The current numbers are also the reflection reflection of Cipla's subsidiaries that got incorporated in the company. The one-time payment over the manufacturing deal with Isreal's Teva for the heart burn drug Nexium has also helped Cipla pump up its revenues.

Its US operations are being run by Timothy Crew, who is an ex-Teva hand. Kremers is expected to give Cipla an ideal jumpstart in the increasingly competitive US specialty generics market where large Indian rivals like Sun Pharma and Dr. Reddy's are already deeply embedded.

Cipla has aggressively expanded its operations in the last 18 months, setting up front-ends in more than 15 markets outside its home turf India. Some of those include Yemen, Sri Lanka, Uganda, Morocco, Algeria, the US and a few European nations.

"Overall, the outlook for full-year 2015-16 is strong. And we expect to have a growth rate of approximately 20% for the year," Sudhanshu Priyadarshi, COO at Cipla, said on its first quarter earnings conference call. "We are evaluating reinvestment options in R&D, consumer healthcare and biologics, while at the same time maintaining Cipla's high standards of quality, affordability and safety."

In response to questions from ET, a Cipla spokesperson said the company does not comment on any product or partner discussions. "As a pharmaceutical company, we are constantly in discussions with multiple parties on potential collaboration opportunities - in line with our aspiration to drive access and ensure availability of high quality, affordable medicines," the statement added.